Salesforce.com profit seen flat, revenue higher

Autodesk, Intuit, BEA Systems, Compuware also ready quarterly reports

By

MichaelPaige

LOS ANGELES (MarketWatch) -- Among a number of software firms preparing to hand over their latest quarterly results to investors in the coming week, Salesforce.com Inc. is expected on Wednesday to report that its profit remained flat compared with a year ago as it invests in its business, with revenue surging around 58%.

Analysts, on average, estimate that Salesforce
CRM, -0.23%
will report a fiscal first-quarter profit of 4 cents a share, unchanged from a year ago, according to a Thomson First Call survey. Quarterly revenue at the company, which delivers its customer-relationship management software via the Internet, is expected to have surged to $101.7 million from $64.2 million, based on the average of estimates.

The company's own forecast calls for a profit of 1 cent to 3 cents a share, reflecting its purchase of Sendia Corp. -- Salesforce's first-ever acquisition. Salesforce's projection calls for revenue ranging between $99 million and $101 million. See archived story.

As is usually the case, investors are likely to key in on the number of new subscribers Salesforce manages to pick up for its service as an important measure of its performance.

Some analysts predict new subscriber signings will have declined quarter on quarter following the record number of additions enjoyed during the preceding three-month period. See archived story.

Analyst Heather Bellini at UBS, who expects the San Francisco-based company to report a profit of 3 cents a share on revenue of $102 million, agreed the "key metric" in the results will be subscriber signings.

Bellini estimates Salesforce will have added about 46,000 net new subscribers during the quarter.

"This level of [subscriber] signings would represent the first sequential decline in this metric since October 2002 and would not come as a surprise given the company's rapid growth of the past few years," she recently told clients.

Based on comments made during the company's discussion of its last set of results, Rick Sherlund, an analyst at Goldman Sachs, said the company implied new subscribers would be in a range of 45,000 to 46,000.

"At the time, the guidance appeared to be targeted at reigning in some of the more optimistic expectations," he said in a recent note. Yet, with the stock having lost some 13% since the beginning of last month, Sherlund said he believes "investors do not anticipate much if any upside" in its subscriber additions.

Investors' expectations have been kept relatively in check, Bellini at UBS said, and the market is unlikely to be shocked if Salesforce's number of new subscribers comes in little changed or slightly down from the prior quarter.

Sherlund anticipates the addition of 48,000 subscribers, though he conceded his estimate is likely optimistic and above other analysts' estimates that he put closer to 44,000 to 45,000. The Goldman Sachs analyst estimates the company's profit at 4 cents a share on revenue of $101 million and rates its shares in-line.

The company experienced a slowdown in business in February due to a realignment of its sales staff, the UBS analyst said based on her checks.

Bellini rates the shares reduce and would potentially look to take a more aggressive position on the name if it fell to lower prices. Her price target for the stock is $27. See advanced charting.

Autodesk set for higher profit as revenue jumps 21%

On Thursday, design-software company Autodesk Inc.
ADSK, -0.50%
is expected to report a solid set of results for its fiscal first quarter, with revenue climbing more than 21% as its industry-focused and three-dimensional product lines continue to win favor among customers.

Analysts anticipate the San Rafael, Calif.-based firm will post a quarterly profit of 31 cents a share on revenue of $431.1 million, up from 30 cents and $355.1 million, respectively, in the year-earlier period.

Autodesk, which makes the AutoCAD software program widely used by engineers and architects, has forecast a profit for the period of between 30 cents and 32 cents a share. The company's forecast calls for revenue of $425 million to $435 million.

Tim Fox, a Deutsche Bank Securities analyst, recently told clients that his U.S. and European checks indicated Autodesk enjoyed a "solid quarter." He's looking for results to come in at the high-end to slightly above the company's own outlook.

Fox rates the shares buy with a target price of $45.

Lehman Bros. analyst Israel Hernandez also expects a solid set of results from the company. He pointed to AutoCAD upgrades related to the retirement of the 2002 version, as well as some accelerated purchasing ahead of a price increase in March.

Hernandez said the company's European business was likely stronger than expected, while its North American and Asian regions likely tracked to plan.

The company's stock could move 5% to 10% higher from current levels if it manages to post a solid set of results and guidance inline with expectations, he said. He added that sentiment towards Autodesk is likely to improve over the near term.

Compuware, BEA Systems, Intuit also expected

Meanwhile, analysts expect Compuware Corp.
CPWR, +1.92%
on Tuesday to report its fiscal fourth-quarter profit climbed to 13 cents a share from 7 cents a year ago. However, the average estimate calls for revenue at the Detroit-based company to come in lower by 1.8% at $313.1 million, down from $318.8 million.

On Wednesday, BEA Systems Inc.
BEAS
is seen reporting a first-quarter profit of 10 cents a share, up from 9 cents a year earlier. Analysts, on average, estimate the San Jose, Calif., company's revenue will have risen just over 14% to $322.1 million from $281.7 million.

Also on Wednesday, Intuit Inc.
INTU, +1.41%
is expected to report a higher profit on a 13% climb in revenue thanks to strong demand for its TurboTax software used by customers to file their tax returns.

The average estimate calls for Mountain View, Calif.-based Intuit to have earned $1.76 a share for its fiscal third quarter, up from $1.53 a year ago. Analysts anticipated that revenue rose to $943.7 million from $834.9 million.

Intuit, in late April, pegged its profit for the period at $1.67 to $1.68 a share on revenue of $940 million to $945 million. Excluding non-recurring items, Intuit put its profit at $1.75 to $1.76 a share for the quarter. See full story.

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